שיווק ואסטרטגיה לסטאטרפ
How to think like a startup and behave like a company
The purpose of the Startup Your Business guide is to show you how to succeed.
How to think like a startup and behave like a company
The purpose of the Startup Your Business guide is to show you how to succeed
An accelerator program is a concept designed to helps startups build stable business infrastructure, in order to recruit investors, make an exit or generate sales.
Your reality as an entrepreneur is more complex than ever. The market standards are constantly rising, competition is growing, and the percentage of investments in startups in their initial stages is shrinking. These days a good product is not enough to attract investors, who demand to see proofs before the make any decisions. When you add to this the difficulties entailed in developing a product, managing a team, marketing and sales, it’s easy to understand why each year 600 Israeli startups shut down.
An accelerator helps startups to operate like a successful business. The company was established by the entrepreneur and business mentor Nir Makovsky, in order to provide a complete, simple and practical solution, based on personal experience in the worlds of entrepreneurship and business. His experience enables us to understand quickly what is important and what is not, and to offer ongoing consulting until you find investors, make an exit or establish your company and generate sales – in accordance with your goals and the current stage of your startup. We will also set up a meeting for you with a panel of potential investors and guide you during the process of building your presentation.
Our guiding principle is the successes are not accidental, but are the outcome of proper planning. By first mapping the idea and the market, we will prepare a comprehensive and objective situation overview that includes financial and practical feasibility. In the next stage, we will build an action plan that is simple to implement, starting with outlining the vision, defining roles and describing the clients, to building marketing and sales systems, setting goals and drafting timetables. We will work with you to implement this plan in the field, and will be on standby to provide a quick response to any question or request.
How does it work?
The work process follows the SPORT paradigm that we developed, modeled on the example of modern sports professionals, whose training is planned down to the finest details, including the number of hours of sleep.
The Starting Point (TSP)
Analysis of the current situation and building a foundation for successful business operation – from vision and goals to marketing and sales
The Safe Ride (TSR)
Ongoing consulting toward the § of the company, building a detailed plan and implementing it.
The Take Off (TTO)
Growing into a mature company – business development, business ties and preparing to meet with potential investors – building a presentation and advice on managing the meeting and its follow-up
“We set up startups, based on a need and/or a personal story, alongside the thought that we will create better lives for ourselves; work less and earn more. In practice, most initiatives fall apart when they hit reality, but I still believe that everyone can succeed. I have had experience with simple ideas that succeeded and sophisticated ones that failed.
“I have 27 years of experience, during which I have expressed dizzying successes and painful failures, brilliant ideas and major mistakes. In the words of Shimon Peres, ‘Whoever doesn’t fantasize cannot do fantastic things.’ I believe in dreams, but in order to realize them, you have to wake up and go beyond your comfort zone.”
Nir Makovsky, founder, Accelerator
Do you have POC or MVP and you want to succeed?
Looking for a breakthrough?
Make sense of : Business plan, straategy, coaching, mentoring, marketing , business development etc
Are you looking to recruit investors and increase sales?
Want to know how to build a winning startup?
I am here for you!
About this document
I called this document “The document.” This is a document of understandings/principles, also known as a memorandum, from the Latin “memoranda.”
My vision for the world of entrepreneurship and startups, if you will. My mission statement on how to plan for success.
There are a lot of dictionaries and manuals. I am a big believer in the ability of the Israeli “entrepreneur.”
I also have no intentions of saying there is one way or one formula for success. Because if that was true, we would all be billionaires.
In every professional field, however, it’s worth learning a few basic rules. In construction, you wouldn’t want to place an electric outlet below a tap, and in football, it’s not a good idea to make a foul, because you’ll get a penalty.
The principles document details the architecture for success, with all the components, work methods, work procedures and focal points. A work model based on working productively and correcting errors will turn good entrepreneurs into outstanding professional entrepreneurs.
There are many urban legends, recommendations, and guides, but I want to give you a number of operating principles that can turn your startup into a thriving business. If it were a construction project, these principles would be the most fundamental elements. The following are crucial definitions:
First, a startup is a business.
There are similarities and differences between a startup and a traditional or low-tech business, and they are more alike than different.
The objective is to generate profits.
In business, we sell values and solutions.
For example, the role of a washing machine as a product that we sell is not just about clean clothes, but also about availability and convenience. After all, we could wash clothes in a river or give them to a cleaning service.
The solution itself should serve a purpose, such as saving money, saving time, being efficient, etc.
Ultimately, we must convince our target audience that it’s worth using/buying our good or service.
Different solutions are offered to different audiences, and there are different ways of reaching them.
An application for parents will be different from a software product intended for children.
The two most common characteristics of a startup:
Rapid growth and return on investment.
A startup is a company that aims to offer an innovative solution, usually based on technology. The innovation will be either commercial or technological.
An example of technological innovation is the invention of the disk-on-key. Before it was invented, there were digital storage devices, but this was a technological invention that offered stable memory storage.
An example of commercial innovation is Gett Taxi, a new way of ordering a taxi. Technologically, there were already taxis and there were applications, so the innovation was commercial.
In both these examples, the innovation was applicable to their own era, because today non-electric memory devices are no longer technological innovations, and ordering services via an app is no longer new.
There is also commercial innovation that does not have to be technology based or high-tech. A cooperative supermarket and a cooperative insurance company are commercial innovations in traditional businesses.
The second essential characteristic of a startup is in its growth, from the perspective of both the entrepreneur and the potential investor.
Believes he can conquer the world
Believes he will make a revolution
Is usually motivated by a personal need or story
Needs seed money to get started
To the investor, what is the difference between investing in a startup or in real estate, for example?
First, there are similarities. In both cases, the investor will commit a relatively large sum of money and will want a high return in a short period of time.
The difference is that startup investors are looking for a return multipliers of 5X or 10X, while traditional investments speak in terms of much lower percentages of annual returns.
Both types of investors expect exceptional growth rates.
In contrast, large companies cannot grow that fast, so they buy small companies in order to be their growth engines.
Refers to someone who invests in a startup in the very early stages. In my opinion, the accepted definition (which I will explain below) does not do justice to this term.
If, as a startup company, you have obtained an investment at such an early stage, the investors must believe in you, in the product or both.
Here is my definition of FFF investors:
Fantasizers – Only dreamers and daredevils start with entrepreneurial operations. Entrepreneurship must be nurtured and treated with respect.
Fulfill your commitments – This refers to people close to us, who have chosen to give us money for our dreams. Make an agreement with them and stick to it. Integrity is the key value in the business world.
Focus – This is something that’s very easy to lose. Remember that the initial funding is meant for creating a real product and not just theories.
The more common definition of FFF is: fools, family and friends
Here too, the common definition (venture capital) does not do justice to the term. VC funds are not looking for risks. They’re looking for ROI (return on investment). That is why I believe your perception of such funds should be that you need to meet certain criteria in order to obtain financing from them.
Here are a few suggestions for alternative definitions for the term VC:
Verified concept – Don’t waste the investors’ time on half-baked ideas.
Value creations – What value will the VC receive? Beyond ROI, there could be additional values here, such as innovativeness, strategic activities, trailblazers, etc.
Very challenging – Maybe the potential investors will always greet you with a smile and quality refreshments, in an upper floor conference room with a sea view. But don’t take for granted that the investment is already in your pocket. It’s their job to review hundreds of initiatives a year. Do you know how many of them ultimately garner an investment? Sometimes less than one percent.
Everyone is looking for investments from “angels.” But not all angels are “guardian angels.” Remember that Lucifer was also an angel.
The angel’s objective is indeed to accelerate processes, but every deal with him comes with a price. Investment is not philanthropy, but rather a loan based on equity.
Fund raising is a full-fledged profession.
Respect the angels for the way in which they obtained their wealth. They have seen, heard and done a lot. They don’t owe you anything and don’t need to be your friends.
True, it’s important to maintain good relations with them, and the relationship will be good as long as you meet expectations and fulfill agreements.
You will never know in advance how your relationship will be with them, just as it’s impossible to tell at a wedding how good a marriage will be before it ends up on the rocks.
This means that you have to learn what is customary in the market.
Don’t make unreasonable demands.
Let go of your ego.
You’ll need to hire a lawyer and a CFO who know their stuff.
The best way to keep on the good side of the angel is to fulfill agreements, meet expectations and generate sales.
In this case, I feel the most common definition is correct: Minimal viable product. If you’re incapable of selling the basic product, you have a problem.
My goal is to give you practical advice.
In addition to this traditional definition, there are alternatives that can help you move forward.
MARKET VERIFIED PRODUCT
If you haven’t received feedback from your market, you may as well not have done anything at all, and have essentially been wasting time. The best feedback is from users/buyers.
Even if your users are received their product free of charge, they can still confirm the quality of the product.
Make sure you get feedback. You can initiate a survey.
MOST VALUE PER $
Choose the main value that your product provides. Ask your clients/market what value they are receiving.
MARKET VS PERFECTION
The enemy of excellence is perfection. Usually, if there are no sales, the problem is not the need for additional features, but rather faulty marketing. Additionally, the product might be right but needs fine-tuning.
Proof of concept – Feasibility. The question is, “Which aspect has to be proved?”
There are several possible answers to this question:
Proof of capabilities – Demonstrate that your team has the necessary qualifications for doing the job, and that the technology works.
Proof of cash – This is the second most important thing, and here we return to the issue of demonstrating that you can sell.
Proof of consumers – Get the opinion of the market. The bottom line is whether a potential client has given a letter of intent, a commitment to purchase the product when it is ready. Nothing is more convincing than recommendations from clients. “The best advertisement is a satisfied customer.”
Situation overview – what stage are you at right now?
Before you pour money in and rush to market and/or develop, you need to ask yourselves where you want to go and where you are now. In architecture terms, this would mean a photo of the current situation and a simulation of the end result.
I divide startups into three categories:
(As an introductory note, I believe that in order to understand the middle section, you first need to understand the beginning and the end. We will therefore start with the first stage and then jump to the third, and only then focus on the second)
The first stage – You have an idea
You’ve come across a need, and you have a really wild idea.
Maybe it’s based on a personal story, like what happened to me.
This is wonderful, because you have to be in love with your business. If you don’t love it, you won’t be able to cope with the hurdles along the way. The passion and will to succeed are crucial and are the key to success.
They are what will fuel your enthusiasm when the going gets rough.
But they are not enough. You have to turn thought into action.
The third stage – You already have sales and have attracted investors
You’re on the brink of the moment when you can call yourselves a serious company, or that you can see an exit on the horizon.
In both these cases, both you and the investors want ROI and success. You’ve come a long way and crossed many hurdles.
You might already be swimming in the existing market, and the next breakthrough will be to penetrate more markets, reach more audiences, develop more products. Proper business development. Proper management and relationships are the name of the game. Maybe you already have revenues, but you don’t know how to advance to the next stage. You have no data analysis. What you need is proper management, to plan your route, and get strategic and marketing advice.
The second stage – Make Vs. Break (MVB)
You’ve already invested money, developed a product and shown capability, but the money is starting to run out and you don’t have enough sales. The investors are saying “No” or “Not now.” You have promises from finders.
In essence, you can see the end is near, but you are still maintaining optimism and a smile.
You don’t want to give up on your equity.
What comes first? The money or the sales?
How do you get beyond this snag?
Doomsayers will tell you that without a lot of money, there can be no sales. You need Google and Facebook.
That Israel is small and the main market is abroad.
So it’s true, Israel is small, but a lot of business can be done here.
You can reach everyone here.
The answer is simple. To build a tower, you need strong foundations.
Digging and laying foundations takes a very long time. There are no shortcuts. The concrete has to harden, and then you can build.
That’s why you need to learn to market and sell what you have, and then move on to the next stage.
A winning approach, vs. misconceptions – 13 principles
These are the 13 principles for building a magnificent edifice
Securing a market share
The multiples principle: if there is a market of billions, I need only a thousandth to be worth millions
Planning and implementation. If it were so simple, everyone would do it. The real wisdom is planning, marketing and implementation.
I will be a millionaire
It’s important to fantasize, but in order to make it real, you need to wake up, get your hands dirty and take action. Goals can be bandied about, but you will be measured by KPI and improvement, so you need to prove that you can achieve results.
Do we have competitors
Being first in the market
Being first in the market often means that the market is not ripe and does not promise sales. On the other hand, there is the example of Facebook. There were already social networks, and FB was still the first to really take off.
A company’s robustness is not built on being first but on a large base of satisfied, repeat customers who also bring new customers.
There is no such thing as meteoric growth. Meteors always fall
You need to plan infrastructure for service and data. Often, as happened in one of the companies where I worked, reality is different than the plans. In such cases, disappointed clients can sound the death knell for a company. Sure and steady growth is preferable.
Creating strategic partnerships
People form partnerships, there are no independent sales
Partnership = A common interest. A win-win situation.
It’s good for the other company.
It’s good for the shared client.
For example, a fitness club that shares space with a day camp during summer vacation time.
The fitness club offers an outstanding service to the parents, by providing a day camp for their children.
The day camp makes money.
The parents can go to work and afterwards work out in the same place where their children are.
Focus on your pitch
Many people aim for a perfect pitch. Don’t focus on a Power Point Business Plan. Focus on a prototype. Break out. Bring proof of success. True, it’s important to practice interpersonal communication, but you don’t need to burn a lot of money on pyrotechnics.
Too much information, too many slides
I advise entrepreneurs to have 10 slides in 20 minutes, even if the meeting lasts an hour, because it takes 40 minutes to set up the projector.
Divide the age of the viewers by 2. If a person is 50, use 25-point font. If the person is 20, use 10-point.
When I have, I will be able to do
You have to work on several levels. Life is not linear. You need to make sales, provide service and manage your business – all at the same time.
Protecting copyrights and patents
You don’t really need a patent – there are so many ways, such as sampling or trademarks
A patent doesn’t protect you. You burn a lot of money and you’ll have nothing left. The true protection comes from the market. Generate a broad client base. The longer you are in the market and have more clients, the more protected you will be. And if a patent violation is by a big company, what will you do? You’ll sue. Lawyers will get rich from you and there’s no guarantee you will survive. When is a patent worthwhile? When you develop something chemical, electronic, or mechanical. Even then, seek advice, because there may still be no point.
What % will be left for me? 100% of zero is still zero.
Think like a business – What is the share price and what is the value of my holding.
Hiring people who think like I do
Of course personal chemistry and communication between team members is important.
On the other hand, if everyone thought the same way as you, someone would be superfluous, and it wouldn’t be you. You want people who will complement you with their own relative strong points. Someone who will challenge you. You need to learn how to manage a multi-opinion team.
Important note: The Yom Kippur War erupted because all the decision makers thought alike. Everyone thought there was no risk of a war.
Good relations with the investor
The investor is a friend
He is not. This doesn’t mean you should have a bad relationship with him, but the investor wants ROI. To him, you are a printing press for money. Of course there has to be mutual trust and friendship, and that will hold true if you always remember it’s “as long as things are going well.” You must maintain integrity. Don’t fabricate, and always try to exceed expectations. Don’t try to sell a fantasy. Don’t beautify the figures.
What leads to success?
The product is important, but given that the market is competitive, with many good products, it’s not the product that guarantees success, but the approach. Some entrepreneurs think about problems that could crop up. What could go wrong. Others find solutions.
The Safe Ride – What are the SU’s stages
This is the model for planning the architecture for a successful SU.
Startups dream about very rapid growth. Rapid growth, however, requires proper planning in order to avoid a crash & burn situation.
The way to plan is from the end to the beginning.
Just as you would not start to build a house and then decide whether it’s going to be a cottage or a skyscraper.
A common mistake made by many entrepreneurs is that the launch their startup to quickly in order to raise capital.
I believe that the first thing to do is plan a startup that will thrive.
This means that the planning must be done from the end to the beginning, and will be implemented from the beginning to the end.
The goal can be an exit (IPO and/or sale) or to continue operating a thriving business.
Since everyone wants ROI (as noted in the previous chapter), it is worthwhile and desirable to fantasize.
In addition, the following things are important:
Know your final objective and the means necessary for achieving it
Make sales and raise capital
MVP – Prove the viability of the company, the minimal product that will provide value.
R&D – Research and development
Kickoff – the beginning
Let’s start to put up our building. The execution is divided into several stages:
A solid idea
What we are selling – the product or service. We are selling values and solutions.
Anyone who owns a washing machine knows that it is there for convenience, availability and reliability, not only to clean clothes.
In order to make things happen, you have to wake up and get moving. You can’t be spoiled. You need to get your hands dirty. No one will do things for you. When necessary, you have to be the porter, the cleaner, the salesperson and the CEO.
In the morning, I made sales while wearing a tie, and in the evening I lay on the hospital floor while I cleaned the machine from all the blood. You can’t be spoiled. An investor will not give you money for you to bring in a marketing and sales person. Show him that you know how to do things. Then the investor will understand that if there is money, you will probably be able to teach others.
You cannot be dependent on others. You have to know how to do everything. “The programmer is sick,” or “My salesperson quit” are not acceptable excuses. Just like the company commander in the army, you have to take one corner of the stretcher and shoulder responsibility.
No one will give you money for an idea. The world has changed. The barriers are down. Everything is easier, accessible, global.
You have a business whose purpose is ROI.
This takes planning, goals.
There are plenty of ideas. The difference is that some people dream and others act. The development stage is project management in every way.
A target date
Objective – the value and solution offered by the product
The initial product – its promise to the market, its function in the initial stage.
Make sure the product is connected to the market.
Technical specifications – architecture, components, technology, and the person in charge of each.
UI, UX – graphic branding, usefulness.
Plans for the intermediate stages and a time line.
Control – tracking the progress within the set budget.
Budgetary provision for unexpected expenses and for marketing.
Proper planning will save money, mistakes and time. It’s better to invest one more day in planning than to do work that will have to be redone the next day.
In order to create a recognized product, you have to make tough, unpopular decisions. The first product’s features will not all be optimal.
Firstly, because usually the budget is insufficient. Secondly, the enemy of excellence is perfection.
You’ll never know if you’re in the right direction unless you try the market and make sales.
If your budget is running out, stop. “Finish” the product, try to sell it as is, and see if you’re on target.
There have been many instances when money was invested and the market was not at all interested in the product.
Make sure you get feedback from the market.
First, do market research. Create questionnaires and identify your precise target market. Your target market is not “everyone.”
There is a structure method for doing this: POC – proof of concept.
Verification: Demonstrate that every component works independently. Client side, server side.
Then assemble the components and verify that everything works together.
Validation: Make sure it functions as desired. If you put flour in one opening, pasta dough should come out the other, and not burnt charcoal.
Create an Alpha prototype. At this stage you’ll probably need a strategic client, an early adopter. Someone you trust who will want to be the first in the market. Usually he will receive shares/equity. He is giving you experience. He will give you feedback.
Next is the Beta stage, the controlled release to initial trial groups that will receive the MVP. Conduct feedback and process information on bugs. And there will be many bugs. Identify showstoppers, critical malfunctions.
The next stage is Beta 2, a general rehearsal. Start marketing on a larger scale. You have to show improvements, track data using digital tools, analyze clients and buyers, correct additional bugs.
The Beta 3 stage – start generating revenues and profits, show investors your improved performance, and show them you know how to manage properly.
Marketing, sales and capital raising
Once you have a product, the burden of proof is on us. Improving the asset and its value will put you in a better position for raising capital, resilience against competitors, and most important – the ability to develop and grow in new directions, toward new markets and audiences.
For this you need management and executive skills. You need business development and networking capabilities. Quite often the CEO or entrepreneur has to acquire new skills and use them.
Quite often, the exit is considered the sale of the company; the exit of the entrepreneur from the company.
In practice, the term denotes the transition from a startup to a managed company – the transition from entrepreneurship and the expenditure of money for fueling growth, to bringing the company to the general public in order to provide goods and services in exchange for profits.
Thus an exit can be:
A public offering on the stock exchange
Turning the company into a privately owned concern, with a CEO and Board of Directors, a company that disburses fat dividends to its owners.
It’s true that you’re supposed to understand everything and be proficient in the technology as well as management. Still, I would like to address a few issues that are worth being handled by qualified experts.
Founders agreement – Creates a legal status for the relationship between the parties. The agreement is of no importance as long as everything goes according to plan. In addition, if there is no mutual trust, the agreement means nothing. Its purpose is for bureaucratic processes at government offices, as an agreement to show investors as part of due diligence, and of course (perish the thought), in cases of break-ups. No one likes to speak about that possibility when forming a partnership, but neglecting it would be a critical error that can stall a company’s progress, not to mention destroy friendships.
Accountant – Having an accountant in charge a company’s financial affairs reduces the risk of financial mistakes and demonstrates proper management. A good accountant can meet your needs in the initial stage, concerning a simple business plan, tax reporting, financial advice and safeguarding the money.
CFO – When the company starts generating revenues and there is talk of investors and options, it is important to protect the value of the company. Every large company has a position called Chief Financial Officer, who is in charge of the company’s finances. His job is to ensure that the company’s value is preserved and that money is not spent needlessly. He also prepares financial reports that present a good a proper picture of the company.
Term Sheet – The investment terms are a separate book. Raising capital is a full-fledged profession. Before you speak with an investor, remember: Quite often negotiations are not about percentages but on investment terms, such as double dip, triple dip, veto rights, etc. It is important that you have at your side an accountant and CFO who are experts in their field, before you sign. I wish you success, and that you will get a term sheet.
Share – A financial instrument that allots part of the ownership in a company (control rights in a company), including voting rights, the right to receive dividends and rights upon dissolution. Every shareholder has one or more shares, with rights and obligations concerning the ownership of the company and the relationship with the other shareholders. Some of the rights accorded by a share are economic (monetary) rights, such that the share is an asset with a monetary value. The distribution of the shares among the shareholders represents each shareholder’s proportion of ownership of the company. In other words, the more shares a shareholder owns, the stronger his position will be.
Options – As their name implies, an option to buy shares. An option has a monetary value, but only at the issue/sale stage, as opposed to a share (see above). When agreements are signed with founders, startups tend to grant options. Terms such as 5% options, or 5% of the company, are erroneous terms that can be a pitfall when the time comes. All agreements should be reviewed by a lawyer. In addition, options can also usually be granted at a later stage, in a process called and options plan, in which company employees are given the opportunity to buy shares at a preferred price before the public offering/sale. Such options are both a bonus to the employees and can bring tax benefit to the company.
A good outcome starts with a good plan
Many people think about what to do and what is proper.
I think that you have to start moving and learn along the way. Success will not happen while sitting in front of the computer. Sales will not happen only via the social networks. Do yourselves a favor, take action, learn, adjust.
Entrepreneurship and startups are a profession that is learned on your feet, but it’s an extreme sport that can abound with injuries.
Outfit yourselves with the proper equipment. You wouldn’t go to Antarctica without a suitable coat.
Beyond the startup’s nuclear team, the delegation on this wonderful journey you have chosen includes the CFO, a lawyer and people who can turn your idea into money in the bank.